(May 25, 2010) — Michael Travaglini, who heads the Massachusetts Pension Reserves Investment Management Board (MassPRIM) and is among the highest paid government employees in the state, plans to resign June 11 to go work for a Chicago investment firm.
“The issue of incentive compensation here is back on the front burner,” he said to The Boston Globe. “If you need the context for my decision, it’s an entirely personal one. I have a wife and three children and I’m going to provide for them,” said Travaglini, who currently earns a base salary of $233,000 and can make as much as 40% in addition as a bonus.
Travaglini, who was appointed executive director in February 2004, announced that his decision to quit is a result of efforts by legislators to curb the compensation of people in his office, limiting a performance-based bonus system in the pension agency that he helped create three years ago, according to The Globe. Before working at the fund, he had been a senior vice president and relationship manager for Putnam Investments.
The MassPRIM exec outlined two legislative proposals that he alleged would make it more difficult to attract and retain talent to run the state’s pension fund: The first would limit the ability of state workers to earn more than the governor. The second would block bonuses for years in which the pension fund lost money.
Recently, Travaglini was in the news for denying allegations against State Treasurer Timothy P. Cahill of pay-to-play, asserting that the board’s superior investment record speaks for itself. Cahill, who unenrolled from the Democratic Party to run for governor as an independent, had been lambasted for allegations of pay-to-play fundraising, in which payments are made to influence decisions on where to invest public pension-fund money.
“Since Cahill’s position as treasurer for the past seven years, we’ve been ranked in the top 10% nationally in terms of the investment performance of the fund,” Travaglini told ai5000 in March. “Those returns would not have been possible if we had been making decisions other than objective investment choices.”
Under Travaglini’s leadership, the state’s pension fund has performed relatively well over the five full fiscal years, despite dropping 23.9% in the fiscal year that ended June 30, 2009. As of March 31, MassPRIM had $44 billion under management.
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